By Kerry Lynch
February 8, 2011
The Senate surprised many Washington insiders last week by taking up consideration of Sen. Jay Rockefeller’s (D-W.Va.) two-year FAA reauthorization bill, the FAA Air Transportation Modernization and Safety Improvement Act (S.223), just days after the Commerce Committee Chairman introduced the legislation (BA, Jan. 31/10). The bill was positioned as a bipartisan jobs-creation bill, which cleared the path for consideration on the Senate floor while the legislative schedule is still light for the chamber.
But as deliberations on the bill began, debate primarily centered on health care and other non-aviation matters. The legislation was brought up under open-amendment rules, which enabled senators to offer up nearly four dozen amendments – so far – that deal with a range of topics, from health care repeal to the Davis-Bacon Act covering wages for public projects, in addition to aviation issues.
Debate is expected to continue through this week, and Senate leaders believe that the bill should be ready for a final Senate vote next week. While health care consumed much of the floor discussion, the Senate last week did approve, by a 96-1 vote, an amendment from Sen. Sheldon Whitehouse (D-R.I.) that would strengthen the laws prohibiting people from pointing lasers at aircraft.
The bill Rockefeller introduced is virtually the same one that passed the Senate 93-0 last year. It would reauthorize FAA programs for two years. But since it is the same as last year’s bill, the reauthorization would only run through fiscal 2011 – the current fiscal year. Those dates are expected to change once the bill gets to a House-Senate conference committee.
In addition to authorizing FAA programs, the bill includes an array of other measures covering safety, environment and air traffic control modernization issues, including an accelerated timeline for integration of automatic dependent surveillance-broadcast technology, improved safety for helicopter emergency medical service operations, a call for development of air tour management plans over national parks, a prohibition on FAA from increasing the weight threshold at New Jersey’s Teterboro Airport and a phaseout of Stage 2 business jets.
The Senate bill calls for the Stage 2 phaseout within five years, but Sen. Frank Lautenberg (D-N.J.) is hoping to shorten that timeline with an amendment requiring phaseout within three years. Other amendments awaiting consideration would allow general aviation airports to enter into “through-the-fence” agreements, would provide liability protection for volunteer pilots, and would require FAA to develop air traffic control requirements for unmanned aerial systems.
Sen. James Inhofe (R-Okla.) is sponsoring an amendment that would require FAA to conduct a new rulemaking for flight-, duty- and rest-time limitations for supplemental operators. That amendment, however, is not expected to affect Part 135 on-demand operators.
As introduced, S.223 includes the previously approved tax increase on jet fuel, from the current rate of 21.9 cents per gallon to 35.9 cents per gallon. But the Senate Finance Committee, which last week held a hearing on the aviation excise taxes, is expected to formally vote on the taxes portion of the bill on Tuesday.
The Finance Committee is expected to approve the same 14-cent-per-gallon increase on jet fuel. Finance Committee action also is expected to eliminate the so-called fuel-fraud tax requirements, which require most jet fuel purchased for business jets to be taxed at the higher rates of highway diesel fuel. Under the requirements, the difference in the rates is then refunded to approved “ultimate vendors” who demonstrate that the fuel is used for aviation purposes.
Another measure expected to clear the Finance Committee Tuesday would change the tax treatment of fractional operations. Fractional operations would be assessed the jet fuel tax with a 14-cent-per-gallon surcharge, rather than the 7.5% tax on the price of a ticket or charter. This change comes as fractional operations have faced the higher fees for commercial operations in Europe.
Once the bill has cleared the Senate, it must be reconciled with a House-passed version of FAA reauthorization. The House also is expected to move quickly on the bill, but is taking a more traditional route for consideration. The House aviation subcommittee has scheduled two hearings this week – on Tuesday and Wednesday – on FAA reauthorization issues. A bill, however, could be ready for committee consideration the following week.
While the Senate bill calls for a two-year authorization, the House bill is expected to cover a longer term, perhaps as much as four years. House Transportation and Infrastructure Committee Chairman John Mica (R-Fla.) is expected to eliminate a controversial FedEx labor provision that had stalled the bill in the previous Congress. Mica is also expected to support changes to another controversial provision calling for biannual FAA inspections of foreign repair stations.
The Senate bill contains a similar provision, but includes language recognizing bilateral agreements with other countries. That language quelled concerns of Europeans and industry groups, who fear FAA could not keep up with the increased workloads and that the language contradicts bilaterals that recognize the inspections of foreign aviation authorities. Mica is expected to support a change that would, at a minimum, be consistent with the Senate bill.
The House bill is expected to include a similar jet-fuel tax increase. The House legislation in the previous Congress also included a five-cent-per gallon increase on aviation gasoline. That increase is expected to carry forward in the new bill. House consideration could come soon after approval by the Transportation and Infrastructure Committee, but little time remains before the current extension of FAA’s authorization expires at the end of March. Many Washington observers believe that an 18th extension will be necessary, even for just one week.